UK: Application Of UK Employment Law To Employees Working Outside The UK

The Supreme Court has held that an employee who carried out all
his work outside the UK could nevertheless bring a claim of unfair
dismissal in a UK employment tribunal because his employment had a
"substantial connection" to the UK (Ravat v
Halliburton Manufacturing and Services Limited [2012] UKSC
1).

Facts

Mr Ravat was a UK national who lived in the UK. He was
employed by a UK subsidiary of the Halliburton group. In
2003, he accepted an assignment that involved a rotational working
pattern of 28 working days in Libya, followed by 28 days home leave
in the UK. His work in Libya was for a German subsidiary of the
group and he reported to management based in Cairo, although in
relation to his employment situation he dealt with human resources
departments in the UK and Libya.

His travel costs and overseas accommodation costs were paid by
Halliburton, who classified him for internal purposes as a "UK
commuter", reflecting the fact that when he took on the
assignment he remained employed on his UK salary and benefits
package. He was paid in Sterling into his UK bank account and
paid UK income tax and national insurance contributions.

He was dismissed for redundancy in 2006 and sought to establish his
right to bring a claim of unfair dismissal in the UK employment
tribunals.

Decision

The Supreme Court held that the UK employment tribunals had
jurisdiction to hear his claim on the basis that the
"substantial connection" in fact between his employment
and the UK brought the claim within the scope of the Employment
Rights Act 1996 ("ERA 1996"). There are no longer
any provisions in the ERA 1996 which limit its territorial extent.
Therefore employees working overseas whose employment has a
substantial connection with the UK can be presumed to fall within
its scope.

The category of employment with a "substantial
connection" to the UK exists in addition to the other
categories of "expatriate" employees who, in the earlier
case of Lawson v Serco Limited [2006] UKHL 3, were
identified as also being within the scope of the ERA 1996,
namely:

employees posted abroad for the purpose of a business carried
on in the UK e.g. a foreign correspondent of a British
newspaper;

peripatetic or mobile employees whose base is in the UK e.g.
air crew; and

employees working in a British enclave overseas e.g. at a UK
diplomatic mission or military base.

Analysis

The Supreme Court judgment amplifies the "substantial
connection" category that was left in a rather unclear state
following the decision in Lawson v Serco.

It gives first instance employment tribunals enormous scope to make
a decision on jurisdiction based on the facts of any case.
The "substantial connection" that it must find need not
be based on the inherent characteristics of the employee's job
and may, as in this case, be based on surrounding factors.
The range of factors that can be taken into account in considering
the strength of connection is not limited.

The purely fact-based test makes it difficult to predict how a
tribunal will approach a particular factual scenario, and also
difficult to appeal against tribunal decisions unless the
tribunal's analysis of the facts is perverse.

Although earlier cases have found a "substantial
connection" with the UK where the employee has been employed
to work abroad by the UK government or in a UK government sponsored
enclave, this is the first authority on the application of the
principle to employment in the private sector.

The Supreme Court's decision in this case will apply to all
types of unfair dismissal claim (including whistleblowing claims)
but also to other claims under the ERA, including unlawful
deduction from wages and claims for statutory redundancy
payments.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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